Lobster market outlook 'troubling'

Published on November 28, 2011

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lobster

This story was written a couple of weeks prior to this week's start of the lobster commercial fishery. The fishery was to have opened on Monday, Nov. 28, but winds have pushed dumping day to Tuesday, Nov. 29.

By Kathy Johnson

FOR TRANSCONTINENTAL MEDIA

NovaNewsNow.com

As the time ticked towards the opening of Canada’s largest commercial lobster fishery in southwestern Nova Scotia, preliminary market indications were not the greatest.

The world economy, the value of the Canadian dollar on the international market, strong lobster landings on both sides of the border, and ‘very light demand’ on the lobster marketplace are all factors stacked against the lobster industry going into the season.

“Given the world economy the outlook is not great,” said Denny Morrow, executive director of the Nova Scotia Fish Packers Association.

“Is a very tough economy now,” said Morrow. “It’s a tough time for people to be exporting a luxury product especially if it’s in real high volume.”

High volume is what’s been seen in the neighbouring Lobster Fishing Area (LFA) 35 since the season opened there, up Digby way, on Oct. 15, with reports of boats landing as much as 5,000 pounds per trip during the opening week, with some fishermen maintaining catches in the 3,000 to 4,000 pound range a few weeks into the season.

“If we have the kinds of landings in (LFAs) 33 and 34 that we’re seeing in 35 that’s going to be a lot of lobsters,” said Morrow.

Going into November, shore prices were in the $3 to $3.50 range for LFA 35 fishermen as well their counterparts south of the border.

“The price was in the $4 range, which we can survive with,” said Bill Adler, executive director of the Massachusetts Lobstermen’s Association.

“Then Labour Day came and everything just dropped from there,” said Adler. “At one point in time we were actually doing better than what we were doing last year, then everything changed.

“The supply is backed up. The orders are not there. Our guys are loaded with local product. They’re not even buying what’s in Maine,” said Adler. “Our pounds are backed up and there’s very little trickling out the front door.”

As it is, the live lobster market is not typically that strong this time of year, noted Adler, but is expected to pick up for the holiday season.

Adler said this time last year the shore price was in the $4 range compared to this year’s price of $3.35.

Adler said catches have been good for Massachusetts fishermen this year, but are starting to fall off with less effort by the fleet.

Back on the Canadian side, LFAs 36 and 38 (Grand Manan, N.B.) opened on Nov. 9.

“Once Grand Manan opens, I think we’ll have a really good idea of what’s in store,” said Clark’s Harbour seafood exporter Peter Swim.

However, given the shore prices on the eve of that season opening, and the higher than usual landings in LFA 35, “the numbers are quite troubling,” said Morrow.

“The U.S. dollar is what’s really got us behind the eight ball,” said Swim. “If the exchange rate was back to 20 or 30 cents we’d be okay. Everybody wants good news but the way it is, it’s very troubling for us all.”

With the Canadian dollar hovering around par with the American greenback, buying and holding lobsters is risky business, said Morrow.

“If you buy when the Canadian dollar is at 98 cents and then it shoots up to $1.05 the risk is in your back pocket,” said Morrow, noting for the past two years, live lobster prices have not jumped upin January and February as has traditionally been the case, leaving both fishermen andbuyers holding the crate.

Swim credited the processing sector for doing “a good job over the last few years” for buying up soft shelled product for processing. “They have been very supportive,” he said.

“We do catch a lot of lobster,” noted Swim. “A large volume is landed in a short period of time” during the opening weeks of the LFAs 33 and 34 fishery.

According to DFO statistics, more than half of all lobster caught for the season in LFAs 33 and 34 are landed in November and December.

Preliminary DFO statistics for the 2010/11 season (November to May) show a total of 19,770 metric tonnes of lobster were landed in LFA 34, worth $194,331,000. In LFA 33, 3,772 metric tones were caught, with a landed value of $38,685,000.

For the 2009/10 season, 19,749 metrics tonnes were landed in LFA 34, valued at $179,558,000. In LFA 33, 3,377 metric tonnes were caught for a landed value of $30,877,000.

For the 2008/09 season, 17,262 metric tonnes were caught in LFA 34, with a landed value of $182,214,000. In LFA 33, 3,402 metric tonnes were landed with a value $39,513,000.